MONTREAL – Bell Nordiq Income Fund this week reported net earnings of $8.7 million, while the combined operating revenues of principal operating companies Telebec and NorthernTel were $88.6 million, with net earnings of $26.3 million and available distributable cash of $30.1 million.
As anticipated, cash distributions declared were $23.9 million, consisting of $8.7 million to the Fund and $15.1 million to Bell Nordiq Group Inc.
"Our solid second quarter performance is the result of both stable organic growth and strong margins," commented Roch L. Dubé, president and CEO, Bell Nordiq Group Inc. "Our growth businesses, Internet and wireless, continued to show impressive customer gains, and cash flows remained healthy." At quarter end, the combined reserve balance for Télébec and NorthernTel was $46.6 million, up $6.3 million over last quarter.
Bell Nordiq Income Fund is an unincorporated limited purpose trust created to indirectly acquire and hold the outstanding partnership units of Télébec and NorthernTel. Currently, the Fund indirectly holds a 36.6% interest in both Télébec and NorthernTel, while Bell Canada, indirectly through Bell Nordiq Group Inc., holds the remaining 63.4%. www.bellnordiq.ca
Bell Nordiq Group Inc. holds a 63.4% interest in and is the general partner of both Télébec and NorthernTel. Bell Nordiq Group Inc. manages the business and affairs of Télébec and NorthernTel, as well as those of Bell Nordiq Income Fund and Bell Nordiq Trust. Bell Canada indirectly owns 100% of Bell Nordiq Group Inc.
With the help of its 741 employees, Télébec, Limited Partnership and its subsidiaries (which includes several Quebec cable systems, such as Cablevision du Nord) provide innovative integrated telecommunications solutions to customers in 300 municipalities across Québec. Its territory, which spans 750,000 square kilometres, extends North as far as James Bay, South to Venise-en-Québec near the U.S. border, West to Shawville in the Outaouais, and East to the Magdalen Islands. visit www.telebec.com
With the help of its 214 employees, NorthernTel, Limited Partnership provides innovative integrated telecommunications solutions to customers across Northeastern Ontario. Its territory, which spans 83,000 square kilometres, stretches from Calstock to Latchford and from Virginiatown to Timmins. www.northerntel.ca
Local and access revenues were 7.2% higher due to higher National Contribution Fund revenues and local rate increases introduced by NorthernTel and Télébec in the second half of 2004.
Data and Cable revenues increased 7%, largely due to higher data revenues from national accounts and strong Internet subscriber growth. During the quarter, the high-speed subscriber base grew to 29,180, increasing 28.1% over Q2 2004. A High-Speed Lite offering, introduced earlier this year, continues to help drive growth.
Long Distance revenues were down 9.3%, largely due to competitive pressures and lower long distance calling rates. Within the long distance segment the focus continues to be on maintaining the customer base in order to cross-sell other services. To date, this strategy has shown positive results with long distance customers growing by 2.8% over Q2 2004.
Wireless revenues were strong, increasing 20.2% for the quarter. Growth continued to be driven by subscriber gains along with ongoing demand for value-added services. At quarter end, there were 66,254 wireless subscribers, up 13.2% over last year. Total post-paid subscribers increased 16% for the period to reach 58,909. Due to the deactivation of non-paying accounts, post-paid churn averaged 1.6% for the quarter, versus 0.9% in Q2 2004. Excluding the decision to cancel these accounts, the underlying post-paid churn would have been 1.1%.
IS/IT and other revenues decreased 16.4% largely due to lower equipment sales. The decline was expected and is in line with a decision to focus on integrated IS/IT and telecom services, rather than the low margin equipment business. Gateway sales also came in lower than last year.
"We remain in a strong position,” added Dube. “Our continued financial strength, combined with a sound business model, provide a stable foundation for growth and we are on track to meet our 2005 targets and deliver another year of solid operational and financial performance. Acquisitions remain an integral part of our growth strategy, with our focus continuing to be on those that support our business model and are cash accretive.”
